Updated Research Report on Motorola Solutions - Analyst Blog

On May 21, 2014, we issued an updated research report on Motorola Solutions Inc. MSI. The company posted dismal financial results for the first quarter of 2014 with both the top and the bottom lines missing the respective Zacks Consensus Estimate. Lower contract wins and sluggish economic trends have forced the company to slash its  revenue outlook and divest its Enterprise Business segment.

Motorola Solutions has delivered positive earnings surprises in three of the last four quarters, with an average surprise of 11.97%.

In the first quarter of 2014, Motorola Solutions performed poorly in several metrics. The company reported a decline in revenues across both its segments. Management expects revenues in second-quarter 2014 to drop 5–8% from the prior-year period. The company exited the reported quarter with nearly $2.5 billion debt and a debt-to-capitalization ratio of 0.40.

Moreover, the decision of Sprint Corp. S to gradually phase out iDEN network is another major setback for Motorola Solutions. To worsen matters, Sprint started the elimination of iDEN networks in 2013 and the entire process will take around 3 to 4 years.

Moreover, Motorola Solutions is heavily dependent on government expenditures for its revenues as 70% of its total sales are generated from government agencies. Thus, reduction in government expenditure and macroeconomic fluctuations are likely to affect sales of the company.

Motorola Solutions currently has a Zacks Rank #5 (Strong Sell).


Stocks That Warrant a Look

Other stocks worth considering in this sector include ShoreTel, Inc. SHOR and Polycom, Inc. PLCM. Both the stocks have a Zacks Rank #1 (Strong Buy).

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MOTOROLA SOLUTN MSI: Free Stock Analysis Report
 
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